MA373 S11 Test 1-1

MA373 S11 Test 1-1 - 1. Wang Corporation invests 10 million...

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1. Wang Corporation invests 10 million today to build a new factory. Thereafter, Wang expects to receive the following profits from the factory: End of Year Profits 1 - 1 million 2 2 million 3 4 million 4 4 million 5 4 million 6 2 million The factory will be obsolete and torn down at the end of 6 years. Determine the net present value of this project at an annual effective interest rate of 7%.
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2. While Audrey is in college, her grandparents are depositing 300 at the beginning of each month into an account. They will make a total of 48 payments. The account earns an annual effective interest rate of 12%. How much will Audrey have in the account at the end of 48 months?
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3. Liyana will pay 4000 to each of Hamizah and Mohd today. Mohd will pay 5000 to each of Hamizah and Liyana at the end of 2 years. Hamizah will pay 5000 to Liyana at the end of 4 years. Hamizah will also pay 6000 to Mohd at the end of 4 years. Using the bottom line approach, determine Hamizah’s annual yield rate on this arrangement.
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4. Mike bought a new high definition television for 2000.
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MA373 S11 Test 1-1 - 1. Wang Corporation invests 10 million...

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